Microsoft Shaves $150 off Surface Tablet

Microsoft(SEATTLE) -- After 10 months of being on the market, Microsoft is shaving approximately $150 off the price of its Surface RT tablet.

The tablet, the first to be made by the company, will be priced at approximately $350, down from $499.

The keyboard, which Microsoft has marketed as being a key differentiator from the iPad, will still be sold separately for about $100.

"We've been seeing great success with pricing and cover promotions over the past several months on Surface RT in the U.S. and other markets," Microsoft said in a statement. "People who buy Surface love Surface, and we're excited about all those additional people out sharing their excitement for Surface with other people. "

The 1.5-pound tablet has a 10.6-inch display with a kickstand, 32 GB of storage space and over eight hours of battery life, according to ABC News' review.

The RT version of the tablet, which is now on sale at the discounted price at retailers, including Staples and Best Buy, runs a stripped-down version of Windows 8. While the Surface RT comes with a version of Office, the software is incompatible with legacy Windows programs and only works with new apps in Microsoft's Windows Store.

The Surface Pro model, which is more expensive, thicker and has less battery life, runs the full version of Windows 8.

Microsoft has not released sales numbers on the Surface RT tablet since its release -- though, according to market research firm IDC, the company shipped about 900,000 tablets in the first quarter of 2011.

Analysts believe the $150 price drop is to spur sales on a product that hasn't rivaled Apple's iPad in terms of market penetration.

"The strategy is at $349 to get it into more hands," Rob Enderle, principal analyst at the Enderle Group, told ABC News. "They have to convince people to give something else a try, which is always a problem. Lowering the price lowers the risk for people. Many are willing to take a risk at $349, where they probably wouldn't at $500."

Microsoft has also recently began running ads which compare the Surface RT to the iPad, showcasing that Windows 8 allows you to run to apps side by side. The company will release Windows 8.1 later this year, which will make some much-requested enhancements, including the addition of the Start Button to the Desktop interface.

Enderle believes that the Windows refresh and the price drop will give the Surface a boost before the second generation comes out sometime this year or next. Ultimately, he believes it is a good product and that the drop will get more people talking about that.

"Part of the pricing reduction is to move product," he said, "but with the emphasis to get more product out there and get people talking about what they like, rather than speculating about what they don't like."